7th September 1998 Archive

A UK report commissioned by chip giant Intel has claimed that the PC has finally stopped being a Nerd tool and has become a "lifestyle accessory" for millions of users. The Gallup report surveyed 1,000 people on their attitudes to the use of the PC and the Nerd-word. The survey reported that 90 per cent of the respondents no longer considered PCs the domain of experts, academics and boffis. They considered PCs are now everyday items like TV sets. Education was cited as the main reason for the increase in popularity with 36 per cent claiming they improved childrens' education, while 34 per cent said PCs are now easier to use. Nearly half of the respondents use PCs at both home and work, said Gallup. In the age group 16-44, this rises to over 60 per cent. But men are still more addicted to PCs than women, with figures of 52 per cent and 44 per cent using PCs in this way. This was reflected in the figures for the word Nerd. Women (32 per cent) were nearly twice as likely as men (17 per cent) to say that their partners were "always a Nerd" or "sometimes a Nerd". Fifty seven per cent consider the word Nerd to be insulting, with the average number of Nerds known by respondents to be four. However, one in 20 surveyed said they knew 13 or more Nerds. Gallup said that 44 per cent of those surveyed surf the WWW for general information. ®

A senior Intel executive has claimed that games consoles will be relegated to the dustbin of history. And his claim is backed up by the latest Datamonitor research on the market which shows it will decrease from $3.5 billion in 1997 to $2.9 billion in 2002. Tim Keating, content group director at Intel Europe, told trade magazine Computer Trade Weekly that consoles were "dead in the water" because of the increase in online gaming and the takeup of PCs by home users. The Datamonitor figures show that while the market value of console software in Europe at $1.9 billion outstripped the hardware market at $1.6 billion. But Datamonitor does not see consoles terminating and thinks that innovation will still make the market lucrative. ®

A report from market research company Datamonitor has claimed that revenues from interactive TV will still deliver significantly less money than PCs by the year 2002. The survey, PC vs TV Interactive Services: The Revenue Battle, looks at Europe, shows that PC based services will reach $17 billion by 2002, still dwarfing TV based revenues at $6.7 billion. However, TV based interactive services will grow from a base of only $20 million last year. According to Datamonitor, revenues for Internet access are still the largest part of the PC based segment. Content based applications including games and gambling are set to grow in this sector. On the other hand, it will be shopping which will account for most revenues from interactive TV applications, said the report. That will generate $3 billion of revenues by 2002. But PC households which are online will begin to plateau by then, said the survey, reaching around the 40 million mark. ®

The CD-ROM consumer software market in Europe is set to grow to $4.3 billion by the year 2002, according to a market research report. That represents an increase from a figure of $1.2 billion in 1997, with the games market then accounting for 65 per cent of that figure last year. According to the report from Datamonitor, Revenue Opportunities in Consumer Software, 36.5 million CD-ROM software units were sold in western Europe in 1997. That figure is expected to almost triple by 2002 to 91.1 million units, the report said. Of the different marketplaces, Germany took the lion's share, with the market worth $527 million in 1997 and set to grow to $1.3 billion by 2002. The UK takes second place to Germany, with a market value of $333 million last year. According to Datamonitor, consumer CD-ROM software is one of the most profitable mediums in western Europe and will grow because of the forecasted increase in sales of multimedia PCs. ®

"The NC is discredited," Bill Gates told the IDC European IT Forum in Paris today. He had a vivid memory that three years ago he had found himself in the position of defending the PC as the status quo at the same meeting in which Larry Ellison gave an impassioned presentation of the NC. Today he suggested that Microsoft could accommodate the terminal approach within a Windows-based system. So far as potential sequels to the NC were concerned, he thought it was unrealistic to believe that every software application could be rewritten in another language. He couldn't bring himself to mutter the name of Java, but mercifully he didn't mention Basic either. Microsoft's role, Gates said, was to develop low-cost software building blocks. In the future, he still saw Windows, Office and BackOffice as providing around 90 per cent of Microsoft's revenue. Ventures like Expedia and other Microsoft web ventures would not become more important to Microsoft, although some were now breaking even. It was possible that the business would pass a billion dollars a year, but growth prospects were limited. Other sectors where Microsoft would not compete included ERP (enterprise resource planning), chips, systems hardware, and software services. Microsoft would continue working through some 12 to 15 major partners to develop its SQL Server product. One of the things that was currently exercising Microsoft was how to keep servers operating for a year or more at a time. Quite a few people would like the answer to that. On the appliance front, it was interesting that Gates said that "Windows CE will be very popular" and did not brag of any sales success. In repeating the false claim that the Microsoft Terradata database was the biggest on the Web, Gates showed that he was evidently not receiving the bad news that he claimed was sent around in Microsoft email. IBM has bigger databases, including one for patents. Gates said that Microsoft had found that beta testing for products like a new version of NT was taking nine months rather than the six months that beta testing had taken previously. He would not be drawn for a date for NT5 other than to state that it would be some time in 1999. It will be another two years before Microsoft has cracked handwriting recognition, Gates said, although R&D expenditure had increased each year. Asked to name Microsoft's two main competitors for the next five years, he mentioned IBM and Sun. Perhaps the newest thing in Gates' presentation, which bore the scars of many previous presentations to student groups, was that he was wearing new wire-rimmed spectacles. The other new thing is that he is living the web lifestyle in his cottage by a lake in Washington with a 45 megabyte/second connection to the Internet. ®

"Will Europe leapfrog the US in electronic commerce?" This was the question posed by Frank Gens of IDC at the IDC European Forum in Paris this morning. Last year his report was negative, with Europe reckoned to be two years behind the US. Now it is a matter of months behind, and growing faster then in the US. Within Europe, there are marked differences. Gens showed data indicating that France lags in terms of both Internet users and purchasers, whereas the Nordic countries were the leaders in home Internet use. Highest sales were in Germany, with the UK not far behind. The most surprising finding was that although few Italians use the Internet, those who do were very enthusiastic spenders online, he said. Although e-commerce was generally not profitable at present -- costs were $17 billion/year whereas sales were only $32 billion/year -- he forecast that by 2002 costs would be $167 billion and sales $426 billion. Business-to-business sales represented 66 per cent of online sales at present, and Gens estimated this would increase to 79 per cent, which contrasts with the world economy, where 61 per cent of sales are to consumers. In the next 12 months, a critical milestone will be passed, Gens noted: annual e-commerce sales will exceed Bill Gates' net worth. Gens also forecast if not the death of the PC era, at least strong competition from Internet devices. In the US, in 1997, 4 per cent of Internet access was from appliances, but by 2002 this is forecast to increase to 43 per cent. So far as preferred suppliers were concerned, there were consderable differences between Europe and the US, with the uncommited being higher in Europe. Microsoft was a 47 per cent favourite in the US, but only 11 per cent considered MS a preferred supplier in Europe. IBM's mindset had increased over the past year, increasing from 3 per cent to 10 per cent as a result of IBM's blitz on the market.®

TechData has posted a 29 per cent increase in earnings for its second quarter, ended 31 July. Company bosses singled out European sales growth as a key contributor to the Q2 figures. Overall, the company showed a $27.7 million profit, up from £21.5 million for its 1997 second quarter. That does not include an extra $12.5 million (pre-tax) made on the sale of German distributor Macrotron to Ingram Micro. Revenue for the second quarter was $2.21 billion, a big increase on the $1.55 billion the company recorded last year. TechData's own purchase of Macrotron led to a 233 per cent year-on-year increase in international sales for the quarter. Discounting Macrotron, international sales rose 30 per cent, compared with 19 per cent in the US. While the company's recent purchase of Computer 2000 did not affect the Q2 figures, TechData president and COO Tony Ibarguen believes its contribution in future will be significant. "Going forward, the balance [of international sales to domestic] will be even more different because of C2000," he said. In the second quarter, international sales accounted for 26 per cent of TechData's total sales, up from 11 per cent the previous year. Ibarguen said that was likely to increase further to 45 per cent in the second half of the year.®

IBM is running a high-street style 'buy two get one free' promotion and is offering interest-free financing on its 5500 and 7000 Netfinity server solutions. The Netfinity 7000 product line is now available on interest free financing terms, meaning that a £36,000 server can be paid for in three annual instalments of £12,000. The 'buy two get one free' promotion applies to hard disks and to Netfinity 5500 or 7000 rackmount servers. The company is also running a part exchange scheme, whereby a customer can trade in an existing server - any make/model and any platform - for an allowance of up to £1,800 against any new IBM Netfinity server. Tony John, IBM Netfinity server brand manager commented: "In today's competitive marketplace, customers of all sizes need more than reliable hardware to run their businesses efficiently. Customers are demanding integrated solutions for managing their IT infrastructure." ®

How can you sue an email address? That's the question US investment house Itex is asking after company lawyers issued a writ against 100 on-line identities -- despite having no knowledge of who actually uses those Ids. The Portland, Oregon-based company filed the suit after three months' of messages posted on Yahoo! that alleged Itex's "current management is blind, stupid and incompetent". Itex regards such outburts as defamatory of both the firm and its bosses, and claims they have underminded the confidence of the company's investors and customers. However, all the messages were appended with names like Orangemuscat, Investor727 and Colojopa -- in fact, the Itex suit lists 100 IDs of people "presently unknown to plaintiffs but whose true identities will be included in amendments hereto when those identities are discovered". Unfortunately, an Internet portal, not an ISP, Yahoo! itself has no way of knowing the real identities behind the handles, though under a court order it would reveal the email address and other information about Internet user who set up those accounts. And even that data could be false. Yahoo! disclaims all responsibility for the messages posted on its message boards. ®

UK firm Internet Computer Bureau (ICB) has begun targetting professionals, including doctors, lawyers, academics and accountants, following its acquisition of the rights to manage the obscure .ac Internet domain name. However, the domain's similarity to the well-known .ac sub-domain, used to indicate and academic site, such as Leeds University, leeds.ac.uk, may lead to confusion. The .ac name itself is owned by the Ascension Islands, a British dependancy in the South Atlantic whose main trade is fish. Its population is 1100. "They're selling their national asset and inviting any member of the Internet community to register," said Paul Kane, ICB's general manager. ICB charges £30 to register a .ac sub-domain and a further £30 per year fee. Certain sub-domains, such as .co.ac, .gov.ac and .ac.ac, fighter pilots may be pleased to know, are reserved for Ascension Island uses. Disputes over trademarked names will be handled by the Geneva-based World Intellectual Property Organisation. Further details are available at the nic.ac Web site. ICB already runs the .sh domain on behalf of St. Helena, and its activities are part of the current trend of trading in unusual national Internet domains. The former Soviet republic of Turkmenistan was, until recently, aggressively selling .tm addresses. Trade was suspended because some addresses "may be legally obscene in Turkmenistan", according to the registration Web site. More recently, the island of Tuvalu sold the rights to its .tv domain name to a Canadian broadcaster for $60,000.®

Confirmation that the computer is no longer the sole domain of the middle class, nerdy male comes from Forrester Research, a US market research company. According to a new report, the rest of the population - women, non graduates and poor people - are now buying PCs. First time buyers will account for 40 per cent of the 1999 PC sales, the report said. More women and non-graduates will be represented in the group - only 37 per cent will have been to University. Low income households will account for a significant portion of the first time buyers. This group has been attracted by the sub $1,000 PCs that are easy to set up and use, the report says. Repeat buyers on the other hand will mostly be men and 65 per cent will have a college education. This group will have less interest in price and be more concerned with the spec of the machine. People buying additional machines are also less concerned with cost, but will be looking at network options to share peripherals and Internet access. Over half of this group cited education as their primary reason for buying a new computer. "PC makers will need to refine their product strategies to tap the motivations of each buyer category," said Shelley Morrisette, director of Quantitative Research at Forrester. Morrisette points out that the one constant demand from all groups buying PCs next year is the Internet. Forrester says that the number one motivation for buying a PC is going online, and suggests that all PC makers bundle Internet access with their PCs.®

Macrovision is releasing a new CD-ROM anti piracy solution, SafeDisc. The new product is designed to help software publishers regain some of the billions of dollars the industry loses to software piracy and unauthorised copying every year. SafeDisc is a software based solution that uses both a digital signature and encryption to protect CD-ROM content. The digital ID, which cannot be copied by CD recorders or mastering equipment, is embedded by the laser beam recorder at the time the CD-ROM master is made. The product also has anti-hacking features designed to deter consumer and commercial pirates from making copies. "We have successfully addressed the three critical areas needed for a viable CD-ROM copy protection solution: compatibility, effectiveness and manufacturing quality assurance," said Brian Dunn, vice president of Computer Software Copy Protection, Macrovision. SafeDisc has undergone compatibility testing with industry-leading software publishers, a group of over 400 consumers, and a major third party test facility. According to Macrovision, it achieved over 99 percent compatibility on more than 250 combinations of CD-ROM hardware models and firmware levels. ®